The growing popularity of subscription boxes has led to a rise in M&A activity and funding for subscription box start-ups. Available across industries, they target specific consumer needs through different subscription models: pure convenience, experiential convenience and indulgence. Generally, successful boxes are those which attract and retain their existing clients thanks to the integration of local preferences as well as the right balance of savings and differentiating benefits.
Subscription boxes have exploded in the marketplace, with their growth further accelerating in 2020 due to the Coronavirus (COVID-19) pandemic. Consumers’ need for entertainment at home allowed boxes like meal kits, toys for children, or self-care assortments to expand. Witnessing the model’s popularity, industry giants like Amazon (Amazon Subscribe & Save) and Edgewell (Wilkinson Men/Women Razor & Shaving Subscriptions) have adopted this business model, while successful start-ups like Lookiero have continuously raised funds.
Winning boxes across industries are those that can attract and retain their existing clients by providing the right balance of savings (time and costs) and differentiating benefits (notably through personalisation and diversified product offering).
Subscription boxes can now be found across industries, under different models such as convenience, experiences and indulgence. While convenience boxes appeal to those seeking discounts or product replenishment across industries such as personal care, and indulgence ones are more prominent for non-essential/self-pampering categories such as beauty and flowers, experiential boxes aim to provide the perfect balance between both models.
Countries across Western Europe have different approaches to the subscription model variants. French and UK citizens are keener to discover and try out indulgent ones, whereas price-sensitive Germans prefer convenience boxes that provide discounts. Spain and Italy remain laggards in the acceptance of subscription boxes, notably due to the lower penetration of e-commerce. With popularity comes the growth of players within the segment, explaining why, in Italy, subscription models are scarcer and consumers still need to be convinced.
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